12 Questions
What is the beta of security i given Cov(Ri,Rm) = 0.01104, ρi,m = 0.3, and σm = 0.16?
0.195
Based on the historical data for RTF and KIU, what is the estimate of the covariance between RTF and KIU?
0.065
If the correlation coefficient between RTF and KIU is 0.4500, what does this indicate about their relationship?
They have a strong positive relationship
Given the data for JKU stock and a market-index, what does a high covariance suggest about the relationship between JKU stock and the market-index?
A strong positive relationship
How does beta differ from correlation coefficient when analyzing securities?
Beta measures volatility relative to the market whereas correlation coefficient measures the strength of the relationship.
In finance, what does a low beta value for a security typically indicate?
Lower risk compared to the market
Based on the capital asset pricing model (CAPM), how is JKU valued?
Undervalued if the expected return is greater than the required return
Using the asset-based valuation approach, what is the estimated value per share of ZANACO?
K17.14
Which discount rate is likely to result in a negative Net Present Value (NPV) for the given project?
15%
If the broker submits a limit buy order for 700 shares at K20.50, what is the most likely average price they would pay?
K20.50
Assuming the beginning value of the float-adjusted market-capitalization-weighted equity index is 100, what is the likely ending value?
105.71
Calculate the firm's degree of total leverage (DTL).
1.7
Test your knowledge of the LuSE Bond Listing Rules by reviewing objectives, compliance requirements, listing methods, and offer documentation particulars for debt securities on the Lusaka Stock Exchange (LuSE) website. Explore various types of documentation submitted for listing applications.
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